Don't Forget to Claim Your Money- The Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a tax credit for low and moderate income individuals and families. For those who qualify, the EITC reduces the amount of tax owed and may result in a refund, and is not counted as income for families receiving CalWORKs assistance. More than 350,000 California taxpayers received a state EITC in 2015; the average payment was $524, and more than $189 million dollars was returned to Californians.  Notably, the Franchise Tax Board identified an additional 55,000 taxpayers who might have been eligible for the credit in 2015 but didn’t claim it.

 

To get an EITC, individuals and families must file a tax return, even if they do not owe any tax or are otherwise not required to file.  A federal return must be filed to receive the federal EITC and a state return must be filed to receive the California EITC, as each EITC has its own income limits and other requirements. For example, California does not differentiate between married and single-head households.

Income Limits and Maximum California EITC Amounts

Number of Qualifying Children	California Maximum Income			Cal EITC (up to)
None	$		6,717	$	217
1	$	10,087		$	1,452
2	$	14,161		$	2,406
3 or more	$	14,161		$	2,706

For tax year 2016, the federal EITC is available to individuals and families whose earned income and adjusted gross income does not exceed the following:

 

     Filing Status                              Number of Qualifying Children

If filing...	Qualifying Children Claimed
	Zero	One	Two	Three or more
Single, Head of Household or Widowed	$14,880	$39,296	$44,648	$47,955
Married Filing Jointly	$20,430	$44,846	$50,198	$53,505

Maximum federal EITC amounts are higher than State amounts:

Maximum Federal EITC Amounts

Number of Qualifying Children	Federal EITC (up to)
None	$		506
1	$	3,373
2	$	5,572
3 or more	$	6,269

There are many EITC resources available for both LCSAs and families. To learn more about California’s EITC, visit the Franchise Tax Board’s EITC website at: https://www.ftb.ca.gov/individuals/faq/net/900.shtml.

Tax filing assistance is available to all California families at no cost.  Information can be found at:  http://caleitc4me.org/get-it/. 

Additional resources for LCSAs are also available on the California EITC Partner Portal at: https://www.ftb.ca.gov/individuals/faq/net/900_media.shtml.

For more information about the federal EITC, visit the IRS Earned Income Tax Credit page at: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit. 

We hope you find this information valuable for you and your customers.  If you have any questions regarding this message, please contact the Policy and Program Branch at (916) 464-5883.

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